VAT Threshold Changes 2025: What Irish Businesses Need to Know
Revenue Ireland has updated VAT registration thresholds for 2025, providing relief for smaller businesses. Learn how these changes affect your business and what actions you need to take to stay compliant.
For the first time since 2019, Revenue Ireland has increased VAT registration thresholds across all categories. These changes, announced in the 2025 Finance Act, provide significant relief for small and medium businesses struggling with compliance costs during economic uncertainty.
The threshold increases range from 10% to 12% across different business categories, potentially affecting over 25,000 Irish businesses currently registered for VAT. This comprehensive guide explains the changes, their implications, and the specific actions your business needs to take.
Goods Supply
Retail, manufacturing, and product-based businessesEffective: January 1, 2025
10% increase allows more businesses to operate below VAT threshold
Services Supply
Consultants, contractors, and service providersEffective: January 1, 2025
10% increase provides relief for service businesses
Intra-EU Acquisitions
Businesses importing goods from EU member statesEffective: January 1, 2025
Reduced VAT registration requirements for EU purchases
Business Impact Analysis
If your turnover is below the new threshold, you can apply for VAT deregistration
Benefits
- • Simplified accounting
- • No VAT return filing
- • Competitive pricing advantage
Drawbacks
- • Cannot recover input VAT
- • May appear less established
- • Potential pricing adjustments
Recommendation: Consider deregistration if input VAT recovery is minimal
Businesses nearing the new threshold should prepare for potential registration
Benefits
- • More time before mandatory registration
- • Input VAT recovery opportunities
- • Professional business image
Drawbacks
- • Additional compliance burden
- • VAT return preparation time
- • Potential customer price increases
Recommendation: Plan for voluntary registration to avoid sudden compliance requirements
Must maintain VAT registration and ensure full compliance with all requirements
Benefits
- • Full input VAT recovery
- • Established business credibility
- • EU trading advantages
Drawbacks
- • Ongoing compliance obligations
- • Regular return filing
- • Administrative overhead
Recommendation: Optimize VAT processes with automated systems to minimize administrative burden
Review Your Current Turnover
Calculate your annual turnover for both goods and services to determine your position relative to new thresholds.
Assess Registration Status
Determine if you can deregister from VAT or if you need to register due to threshold changes.
Update Business Systems
Modify accounting, invoicing, and pricing systems to reflect your new VAT status if applicable.
Notify Customers and Suppliers
Inform business contacts of any changes to your VAT registration and pricing structure.
Sample Business Profile
Financial Impact Analysis
Key Considerations:
- Loss of €3,600 annual input VAT recovery
- Need to adjust pricing to remain competitive
- Simplified quarterly compliance requirements
Don't Miss the Opportunity
The 2025 VAT threshold changes represent the most significant relief for Irish businesses in over five years. However, the benefits are only available to businesses that take proactive action to assess their position and adjust their registration status accordingly.
Whether you're considering deregistration to simplify operations or planning for future threshold management, automated VAT systems help you navigate these changes while maintaining full compliance with Revenue requirements.
Navigate 2025 Changes with PayVAT Confidence
Our automated system handles threshold monitoring, compliance adjustments, and Revenue communications for seamless transitions.